December 8, 2014 Newsletter

Dear Friends,

Tangents:

Fashionistas, take note:

The experts at Pantone have named an earthy reddish-brown hue called Marsala the “it” color of 2015. We look at the impact of the announcement on design circles, noting that the shade will likely appear throughout fashion and décor. But how does one even arrive at a color of the year? Pantone polls designers and creative types about what shades are on their minds and then tips off some marketing partners. That way, they can manufacture products in the shade ahead of time. Some brands have already been using the color. Marsala pants, coats and dresses appeared in the spring 2015 men’s and women’s collections of some designers. One style director met with her team before Thanksgiving to discuss holding space on the website in January to spotlight the color—whatever it was. “Having the color of the year has become a way of displaying authority,” she says.

Birthday: James Thurber, December 8^th, 1894.  It is better to know some of the questions  than all of the answers.

You cannot depend on your eyes when your imagination is out of focus. –Mark Twain

PHOTOS OF THE DAY

UFO Sighting in Seattle

Visitors look at the headless, reclining sculpture of the river god Ilissos at the State Hermitage Museum as part of its 250th anniversary celebration in St Petersburg, Russia, Saturday. The British Museum loaned one of the Elgin Marbles to Russia, the first time any of the ancient sculptures have left Britain since they were taken from the Parthenon in Athens 200 years ago. Grigory Dukor/Reuters

Market Closes for December 8^th, 2014     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Dec. 8 (Bloomberg) — Canadian stocks fell the most in 18 months, reaching a seven-week low, as crude tumbled with copper on an unexpected drop in Chinese imports and banks extended their rout.

     Lightstream Resources Ltd. and MEG Energy Corp. sank at least 15 percent as energy stocks tumbled to a more than two- year low. Canadian Pacific Railway Ltd. and Canadian National Railway Co., which ship crude by rail, slumped more than 1.4 percent. Toronto-Dominion Bank, the nation’s largest lender by assets, declined 2.8 percent to pace a retreat among financial stocks.

     The Standard & Poor’s/TSX Composite Index sank 329.53 points, or 2.3 percent, to 14,144.17 at 4 p.m. in Toronto, the biggest drop since June 2013. The equity gauge slumped 1.8 percent last week for a second week of losses and is down 9.7 percent from an all-time high on Sept. 3.

     The benchmark for Canadian equities has pared its advance to 3.8 percent this year. Trading volume was 38 percent higher than the 30-day average today, as all 10 main groups in the gauge retreated.

     Financials, raw-materials and energy stocks, which make up about two-thirds of the S&P/TSX, are the three worst-performers year-to-date among 10 industries in the benchmark equity gauge for the first time since at least 1988, according to data compiled by Bloomberg.

     Lightstream Resources slumped 16 percent to C$1.62, extending an all-time low as it has fallen 82 percent from a June high. MEG Energy fell 15 percent to C$14.90, also a low. The S&P/TSX Energy Index sank 5.7 percent, the biggest drop since August 2011, as 68 of 69 members in the gauge declined. The group has retreated 14 percent this year, the worst performer among 10 industries in the S&P/TSX.                          

     Crude futures dropped 4.2 percent in both London and New York amid concern hedge funds and other money managers bet too much on rising prices.

     Net-long positions on Brent rose to the highest in four months in the week to Dec. 2, according to data from the ICE Futures Europe Exchange, while bullish bets on West Texas Intermediate climbed the most in 20 months.

     First Quantum Minerals Ltd. sank 5.5 percent to C$16.95, and Teck Resources Ltd. slipped 4.3 percent to C$15.93 as copper fell the most in more than a week.

     Inbound shipments to China, the world’s biggest metals consumer, fell 6.7 percent in November, compared with a 3.8 percent projected increase from a Bloomberg News survey. Exports rose 4.7 percent, missing the 8 percent median estimate.

     Toronto-Dominion Bank lost 2.8 percent to C$52.72, the lowest since Oct. 16, and Bank of Nova Scotia dropped 1.8 percent to C$65.07, the lowest since April. The S&P/TSX Banks Index declined 1.5 percent after losing 4.8 percent last week, the biggest loss since August 2011, as earnings from the nation’s largest lenders disappointed investors.

US

By Oliver Renick

     Dec. 8 (Bloomberg) — U.S. stocks slid, pulling benchmark indexes down from records, with energy producers leading declines as oil dropped to the lowest level since 2009.

     Exxon Mobil Corp. and Chevron Corp. declined more than 2.2 percent to pace losses in 42 of 43 energy companies in the Standard & Poor’s 500 Index. McDonald’s Corp. lost 3.8 percent, the most in two years, after same-store sales trailed analysts’ estimates. Cubist Pharmaceuticals Inc. jumped 35 percent as Merck & Co. agreed to acquire the maker of antibiotics.

     The S&P 500 fell 0.7 percent to 2,060.31 at 4 p.m. in New York, its worst loss in almost two months. The Dow Jones Industrial Average slid 106.31 points, or 0.6 percent, to 17,852.48. The Russell 2000 Index of smaller companies dropped 1.3 percent.

     “The market has got to take a break, there isn’t a lot of investing cash in the market today and there’s not any one thing in particular that’s forcing it,” Ron Anari, the Jersey City, New Jersey-based senior vice president of trading at ICAP Plc, said via phone. “Lower oil may be better for U.S. consumers but it could be giving us an indication of a slowing global economy, and no matter how good we do here we won’t be fully robust unless the world economy shows some activity.”

     U.S. stocks began their biggest retreat of the day, a 0.4 percent tumble that began at 12:09 p.m. in New York and lasted 10 minutes, as a handful of large trades in the S&P 500 e-mini contract hit the market. Four transactions in sizes ranging from 300 to 470 contracts occurred between 12:10:41 and 12:13:28 p.m., according to data compiled by Bloomberg.

     The Chicago Board Options Exchange Volatility Index, the gauge of options prices known as the VIX, climbed 20 percent to 14.21, the most since October.

     The S&P 500 retreated today after capping a seventh straight weekly gain, the longest streak in a year, and closing at a record as better-than-estimated payrolls data increased optimism in the economy. The gauge ended the week trading at 18.4 times reported earnings, its highest valuation since 2009. The Dow also reached an all-time high last week, climbing within 10 points of 18,000.

     The S&P 500 has rebounded 11 percent from a low in October amid speculation the U.S. economy is strong enough to withstand a slowdown overseas and tighter monetary policy after the Federal Reserve wound up its asset-purchase program.

     Chinese overseas shipments rose 4.7 percent from a year earlier in November, the customs administration said today. That missed the 8 percent estimate in a Bloomberg News survey. Imports fell 6.7 percent, compared with projections of a 3.8 percent increase.

     U.S. data last week showed employers added 321,000 jobs in November, the most since January 2012, while the unemployment rate held at a six-year low of 5.8 percent. Reports later this week will show U.S. consumer confidence and retail sales improved, according to economists’ estimates.                         

     Exxon Mobil retreated 2.3 percent while Chevron lost 3.7 percent to help lead the Dow lower. Schlumberger Ltd., the world’s biggest provider of oilfield services, slid 3.4 percent to $84.21. Denbury Resources Inc., Ensco Plc and Williams Cos. lost at least 6.7 percent.

     Energy shares tumbled 3.9 percent as a group to the lowest closing level since April 2013. Laszlo Birinyi, president and founder of money-management and research firm Birinyi Associates Inc., told CNBC “I don’t want to touch the oil stocks.”

     Crude slumped 4.2 percent to $63.05 a barrel as OPEC’s refusal to cut output targets amid an oversupply prompted some banks to cut price estimates.                    

     Six of the 10 main groups in the S&P 500 retreated, while utilities, health-care and financial shares had the largest gains.

     McDonald’s declined 3.8 percent after the world’s largest restaurant chain posted November same-store sales that trailed analysts’ estimates after efforts to revive growth in the U.S. failed to gain traction. Global sales at stores open at least 13 months fell 2.2 percent.

     Wynn Resorts Ltd. slipped 3.9 percent. The government of Macau, where Wynn generates more than two-thirds of its sales, forecast lower gaming revenue in 2015.

     Cubist Pharmaceuticals rallied 35 percent, the most in 14 years. Merck agreed to acquire the company for $8.4 billion in cash. Merck will begin a $102-a-share tender offer for Cubist, the companies said in a statement today. Merck added 0.6 percent to $61.88.

     Celgene Corp. jumped 3.6 percent to $118.19, the most in the S&P 500, and Gilead Sciences Inc. added 0.9 percent to $105.56.

Have a wonderful evening everyone.

Be magnificent!

The soul is the home of all living beings;

and from the soul all loving beings derive their strength.

There is nothing in the universe that does not come from the soul.

The soul dwells within all that exists;

it is the truth of all that exists.

You, my son, are the soul.

Chandogya Upanishad

As ever,

Carolann

All men who have achieved great things have been great dreamers.

                                             -Orisen Swett Marden, 1850-1924

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7